The Intelligence from The Economist Oil and vodka: Russia’s resilient economy
Mar 31, 2022
In this engaging discussion, Callum Williams, Senior economics writer for The Economist, reveals the surprising resilience of Russia's economy following harsh sanctions post-invasion of Ukraine. He delves into how financial markets have stabilized and the historical context that allows Russia to adapt. The conversation also touches on Russia's dependency on fossil fuels amidst ongoing political tensions, painting a complex picture of economic survival in uncertain times.
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Russia's Economic Resilience
- Despite Western sanctions and business withdrawals, Russia's economy shows surprising resilience.
- This contrasts with the expected economic freefall intended to punish Putin's aggression.
Russian Market Rebound
- Initial market chaos in Russia included a collapsing ruble and suspended stock trading.
- However, recent weeks have seen a surprising resurgence, with the ruble nearing pre-war levels.
Russia's Financial Stabilization
- Russia stabilized its financial markets through orthodox policies like raising interest rates and unorthodox measures like banning short selling.
- These actions incentivized saving and prevented further share price decline.